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Note: This article initially stated Windstream had cut their dividend, they didn’t. This article has been amended.

The telecommunication industry is a in a constant state of flux with broadband and wireless technologies radically transforming the industry dynamics. The US alone has a wireless penetration rate of 95%, with telecom companies eager to capitalize on these high growth figures.

In this battle of technology, three companies emerge to the top namely Verizon Communications Inc. (NYSE:VZ), AT&T Inc. (NYSE:T) and Windstream Corporation (NASDAQ:WIN).

Verizon Communication

Verizon Communications Inc. (NYSE:VZ) reports its business operations in two broad segments namely Wireless and Wireline. Revenue share in the Wireline category shrank in response to the industry demand resulting in strategic divestures. Thus, growth in the company is mainly driven by the wireless segment. However, this segment is co-owned by Verizon Communications Inc. (NYSE:VZ) and Vodafone Group Plc (ADR) (NASDAQ:VOD) – 45% of the segment is owned by Vodafone. There have been rumors that Verizon will buy Vodafone Group Plc (ADR) (NASDAQ:VOD)’s stake, but there has been nothing concrete. Verizon Communications Inc. (NYSE:VZ) has been able to maintain its market share with the use of broadband and cloud-services. The company invests heavily in expanding its business portfolio with recent developments such as fiber-optic based FiOS Internet and TV services.

Growth in the wireless market has recently shifted from wireless voice to mobile data. Verizon Communications Inc. (NYSE:VZ) is the leading provider of wireless data with the launch of its 4G LTE Wireless network covering around 89% of the US population in 2013. Growth in the wireless category is likely to persist due to an explosive demand for mobile data. Verizon pays an annual dividend of $2.06 per share, yielding over 4%, and despite a large portion of the cash flows going to Vodafone Group Plc (ADR) (NASDAQ:VOD); I believe Verizon Communications Inc. (NYSE:VZ) is one of the best picks for dividend investment. Over the past twelve months, the company has generated about $13 billion in free cash flows, which indicates that the dividends will be easily covered with the cash flows.

AT&T

AT&T Inc. (NYSE:T) has a more diversified portfolio compared to Verizon with its presence recognized in segments of Wireless, Wireline, Advertising Solutions and others. The company has established a monopoly in the TV service segment with its ‘three-screen’ integration strategy and U-verse technology.

AT&T Inc. (NYSE:T) like all other Telecom giants has adjusted its business portfolio to the changing industry trends. Its recent transition included a shift from post-paid to smartphone services, one of the key drivers of growth in the company. Wireless segment too experienced a boost in revenue of 3.4% mainly driven by a staggering 21% growth in the data revenue.